Croatia too is considering joining the banking union but first it has to join the European Union (EU) and then its first aim will be to enter the Schengen Area, Prime Minister Zoran Milanovic said in Brussels on Friday at the end of a two-day EU summit convened to discuss the establishment of a banking union.
"The vast majority of countries will join the banking union. Let's wait until we join the EU, but we are considering all these options. Our primary aim is entering Schengen as soon as possible to facilitate free movement. We will see about the euro, which is Croatia's prospect, the euro is the money of the EU and we are heading in that direction, how fast is something we have to calculate, which is what we are doing. The same goes for the banking union. This is something that the market and investors are advocating the most and it offers some form of security. Entering the banking union is generally a good thing, it guarantees investors that they are on safe ground. Naturally, all these processes will take away a little of our sovereignty, for Germans and Croatians", Croatia's PM said.
He added that Croatia's economic and fiscal policies are being conducted in a way that may not be agreeable to everyone, but "when you are agreeable to everyone in the end they all hate you".
"If we were to abide by the recommendations by rating agencies in England and America and not the eurozone, but that have the greatest impact on the majority of countries, then we would certainly lay off 30 thousand people, reduce pensions and salaries, not Christmas or holiday bonuses but salaries, and we would be commended. But if this would not result in growth, and it most likely wouldn't, then they would downgrade our rating tenfold. By that token, if you think about it, then you attempt to find some reasonable solution, you endeavour to convince unions that certain waivers are necessary and we hope that this will generate growth and new values," he said.
Milanovic added that the situation in the EU and eurozone was much more stable now than a year ago and now it is heading toward banking and fiscal unity which was at first neglected. "I believe this is a victory for the euro and no matter how difficult the situation is, and it will remain complicated for some time yet, matters today are much more stable than they were a year ago", Croatia's PM said.
